EKS Training
Scenario Five
Ground
Rules
o Don’t work ahead – stay on the current task
o Turn off your cell phone
o Question/Comments – raise your hand, stay in your seat
o No side conversations - don’t even ask your neighbor for help
o Returning volunteers sit next to new volunteers
o Bring your materials every day
o At least try to do your homework – bring your questions
4 Steps:
Class
Structure
1. As a class, we will review Interview Notes, Intake
& Interview Sheet (13614-C) & supporting
documents for each scenario.
2. Instructor will teach Tax Law – referencing
Publication 4012 and 13614-C
3. Instructor will show you how to enter information
into TaxWise. WATCH!
4. Now DO! Students will enter information on
TaxWise
Scenario #5
What you will learn in this scenario:
1.
2.
3.
4.
Scenario #5
Dividends
Social Security Income
Cancellation of Debt – Credit Card
Affordable Care Act – Marketplace coverage and premium tax
credit
What you will review in this scenario:
1.
2.
3.
4.
5.
Filing Status
Personal Exemptions
Income – W-2
Itemized Deductions versus Standard Deduction
Form 8888
Let’s review Anthony and Courtney’s
Information:
Scenario #5
 Interview Notes
 Intake & Interview sheet - 13614-C
 Tax Documents
Interview
Notes Review
 What did you learn about Anthony and
Courtney?
Deep Dive with the 13614-C
 Did they bring all the required documents?
 Everything accurate?
Intake &
Interview
 What’s missing/wrong/mismatched that needs to be
changed?
 Compare tax documents and interview notes
 Make any corrections needed on 13614-C
 Fill out greyed out boxes (dependency and ACA)
Publication 4012, Tabs K-3 and K-4
Does this taxpayer need to file their return?
Who should
Or should they?
file?
Publication 4012, Tab A
Is client eligible for VITA services?
In Scope?
What certification level is needed to prepare
this return?
Publication 4012, pages 8-10
Scope of Services Chart
You Got This!
Scenario #5
Determine filing status and personal exemption
Publication 4012, Tab B-1 and Tab C-1
You Got This!
TaxWise
Enter Anthony and Courtney’s:
 Personal information on Main Information
Sheet
 Everything on page one of 13614-C goes on
Main Info
Publication 4012, K-6 to K-11 for Main Info
You Got This!
TaxWise
Enter Anthony and Courtney’s:
 Income documents:
 W-2
Publication 4012, D-3 to D-9 for Income
Dividend Income
Tax Law
Topic #1
 Corporate distributions such as ordinary dividends,
qualified dividends, capital gain distributions and
nondividend distributions are reported on 1099-DIV
 Ordinary dividends are corporate distributions paid out
of the earnings and profit of the corporation
 Qualified dividends are ordinary dividends that qualify
for lower, long term capital gains tax rates
 Capital gains distributions come from mutual funds and
real estate investment trusts
 Nondividend distributions are nontaxable because it is
part of a taxpayers cost or other basis
 They are treated like interest income in TaxWise – you’ll
enter them on the Dividend Statement
Publication 4012, Tab D-3 to D-5 and D-10 to D-11
Students: WATCH instructor
TaxWise
Enter Anthony’s 1099-DIV on the Dividend
Statement
Publication 4012, Tab D-10 through D-11
Students:
Enter Anthony’s 1099-DIV on the Dividend
Statement
TaxWise
Publication 4012, Tab D-10 through D-11
Social Security Income
Tax Law
Topic #2
 Taxpayers receive a SSA -1099 if they receive benefits
from Social Security Administration – retirement,
survivor and disability benefits
 If taxpayers have other income, part of their Social
Security benefits may be taxable
 Social Security income alone does not require someone
to file their taxes in most cases
Publication 4012, Tab D-26
Students: WATCH instructor
Enter Courtney’s social security benefits on
1040 Worksheet 1
TaxWise
Publication 4012, Tab D-26
Students: WATCH instructor
Enter Courtney’s social security benefits on 1040
Worksheet 1
TaxWise
Publication 4012, Tab D-26
Cancellation of Debt
Tax Law
Topic #3
 Any debt forgiven by a creditor is considered income by
the IRS.
 Creditors and debt collectors that agree to accept at
least $600 less than the original balance of the debt are
required by law to file a 1099-C form with the IRS and to
send it to debtor.
 There are exclusions - use the screening tool in
Publication 4012 Tab D-33 to determine if the client’s
COD is in scope of VITA services.
Publication 4012, Tab D-33
Students: WATCH instructor
Enter Courtney’s cancelled credit card
debt on Line 21 – link to worksheet 7
TaxWise
Publication 4012, Tab D-33
Students:
Enter Courtney’s cancelled credit card
debt on Line 21 – link to worksheet 7
TaxWise
Publication 4012, Tab D-33
You got this!
Enter the Websters’ deductions on Schedule A.
TaxWise
 Mortgage Interest
 Real Estate Taxes
 Charitable Contributions
Interview notes & Publication 4012, Tab F-5
Affordable Care Act - Marketplace & APTC
 Did the Websters have coverage all year?
 If no, let’s review the exemptions before assessing the
Tax Law
Topic #4
Shared Responsibility Payment
 Did they purchase coverage from the marketplace (Covered CA)?
 If yes, did they receive the advanced premium tax credit (APTC)?
Interview Notes, 13614-C, 1095-A and Publication 4012, Tab ACA
You got this!
TaxWise
 Enter coverage information for Courtney on
the ACA worksheet
Publication 4012, Tab ACA
Students: WATCH instructor
Enter Anthony’s marketplace coverage
information (1095-A) on Form 8962
TaxWise
Publication 4012, Tab ACA
Students:
TaxWise
Enter Anthony’s marketplace coverage
information (1095-A) on Form 8962
Publication 4012, Tab ACA
Completing the
CA return
1.
Get the red out! Most information will automatically populate
from the federal return
2.
State EITC Form – 3514*
3.
If you have entered more than one W-2 on the 1040, you will
have to manually add the additional W-2’s. The first W-2 will
carry over, but the rest won’t.
4.
Make sure to complete the direct deposit or balance due portion
of the return
5.
Complete the CA Renters Credit Worksheet when applicable.
*At the time of this ppt creation, details on what TaxWise will auto populate are not
available
You got this!
TaxWise
 Complete the Websters’ CA return (540)
 Do the Websters want to direct deposit their
refund?
 If so, are they requesting to split their refund?
 Do they want to buy a savings bond?
Refund
13614-C and Interview Notes
Ask Every Taxpayer (AET)!
 Remind the Websters of the savings option
Savings
 Answer Questions
 Be enthusiastic and positive!
You got this!
TaxWise
 Enter checking and savings account
information for the Websters on Form 8888
 Remember to enter the 540 account numbers
twice
Publication 4012, Tab ACA
THINGS YOU NEED TO KNOW ABOUT FINISHING A RETURN
Finishing the
return
1.
Ask the questions in the Prep Use Fields
2.
All returns must be Quality Reviewed (checklist on 13614-C) Tab,
K-25
3.
Run Diagnostics to check for errors
4.
Print returns (Federal and State) for Taxpayer
5.
Review return with taxpayer (Formula 1040 activity)
6.
Have Taxpayer and Spouse sign 8879s for Federal and State and
remind them they are responsible for their return and by signing,
they are agreeing it is accurate:
 One copy for the taxpayer
 One copy for the VITA Site
Publication 4012, Tab K
 Do we have matching AGI, refund?
 Let’s review entry of:
Check our
work
- W-2
- Schedule A
- 1040 Worksheet 1
- Dividend Statement
- Line 21
- ACA Marketplace and Premium Tax Credit
Where do we enter Dividends in TaxWise?
Publication 4012, Tab D-11
Dividend Statement
True or False: All Social Security benefits received are always taxable.
Look it up!
Publication 4012, Tab D-26
False – depends on what other income was received; automatically calculated
by TaxWise
Name a reason that cancelled debt would be out of scope for VITA.
Publication 4012, Tab D-33
Insolvency, related to a business, didn’t receive a form
What form will a taxpayer receive if they purchased insurance on
Covered CA?
Publication 4012, Tab ACA
1095-A
Look it up!
True or False: The amount of advance premium tax credit reported on
the 1095-A is always what the taxpayer is eligible for.
Publication 4012, Tab ACA
False– it will depend on actual income information on the tax return.